Islamic vs. Conventional Banking In Afghanistan

Abstract

Banking is one of the most responsive businesses all over the world. Banks play an important role in the economy and are considered as the backbone of an economy in every country and Afghanistan is no exclusion. Banks are keeper to the assets of the general masses. The banking sector plays a major role in a current world of money and economy. It influences and facilitates many different but integrated economic activities like resources mobilization, poverty elimination, production and distribution of public finance. Afghanistan has a well-developed banking system, which consists of a wide variety of institutions ranging from a central bank to commercial banks and to specialized agencies to provide for special requirements of specific sectors. Today, the banking sector is providing financial solutions to the masses and is growing and becoming a solid partner in the development of the Afghan economy, this growth potential has seen different acquisitions in the banking sector, with the Standard. Besides, Islamic banking is widely regarded as the fastest growing sector in the Middle Eastern financial services market. Billion worth of funds are now managed according to Shariah. As Islamic banking is a new concept in Afghanistan and all Afghan citizens are Muslims and this study would also help them to know about Islamic banking activities. The purpose of this is to investigate Islamic banking activities, conventional banking activities, Islamic banking effects on commercial banking, customers ‘satisfaction and their awareness about the banking activities. This study principally involved survey of 9 private banks, 4 governmental banks, and 3 international banks in Kabul, Afghanistan and it this study was done in 6 months. Total of 250 questionnaires were disturbed into the respondent and 162 questionnaires were returned so the data was analyzed through “Statistical Package for Social Science” SPSS Version 20.